Fundamental vs. Technical Analysis
Foundation of Fundamental Analysis: Fundamental vs. Technical Analysis
Fundamental analysis is the process of figuring out what a security is really worth by looking at its economic, financial, and other qualitative and quantitative aspects.
Some of these factors are earnings, income, growth potential, industry trends, the quality of management, competitive advantages, macroeconomic indicators, and events in other countries.
Fundamental analysts usually look closely at economic reports, company news, financial records, and industry trends.
Fundamental analysis is often used with long-term investment plans because it looks at the principles of a security to find securities that are undervalued or overvalued.
Technical analysis looks at past price and volume data to find patterns, trends, and market opinion that can help you guess how prices will move in the future.
Technical experts pay less attention to what a security is really worth and more attention to how its price changes and how many trades are happening. To find patterns and trends, they use charts, graphs, and different types of technical markers.
Moving averages, trendlines, support and resistance levels, chart patterns (like head and shoulders and double tops/bottoms), and oscillators (like RSI and MACD) are all common tools used in technical analysis.
Technical analysis is mostly about short-term price changes and how the market thinks, so it is often linked to short-term trading tactics.
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Table of Contents :Foundation of Fundamental Analysis 1. Foundation of Fundamental Analysis: Overview |
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